An M-Shwari branded bus termini in Nairobi. PHOTO | DIANA NGILA
By BD TEAM
In Summary
The Commercial Bank of Africa’s (CBA) Uganda
subsidiary has applied for a licence to launch an M-Shwari equivalent in
the neighbouring country, seeking to replicate the success that the
mobile banking service has recorded in Kenya.
CBA Uganda has written to the Bank of Uganda (BoU) seeking
the green light to launch a savings and loans mobile service by April in
collaboration with MTN, one of the country’s leading telecommunications
operators.
CBA Group in May 2014 launched a similar product
(M-Pawa) in Tanzania in partnership with Vodacom, meaning that the
Uganda launch will see the model replicated in all three countries where
the lender has a presence.
“We are seeking approval of the central bank before
we can launch the product by the end of the first quarter of 2016,”
said Samuel Odeke, the CBA Uganda chief executive, in an interview with
Ugandan publication Daily Monitor.
“We are working with the mobile operator, MTN, to
test the product that will help develop the culture of savings and
access to financial services. There are various regulatory requirements
we have to meet as prescribed by BoU.”
CBA Uganda started operations in April 2014, but
held the official launch ceremony in Kampala on Monday where Mr Odeke
disclosed the partnership plan.
Launched in November 2012, in partnership with Safaricom, M-Shwari has strengthened CBA’s position in retail banking with its customer base currently at 13 million.
M-Shwari’s deposits as of March 2015 stood at over
Sh153 billion, placing it in the category of large banks while its loan
book was at the time in excess of Sh29 billion.
The bank processes an average of 70,000 M-Shwari loans daily.
“The product is already in Tanzania and, in line
with our strategy of extending the Kenyan model to all our subsidiaries,
we have sought approval to launch it in Uganda,” Chris Pasha, CBA
Group’s head of marketing said in an interview.
“(The product) is relevant to the Ugandan market,
which only has 15 per cent penetration of formal financial services,” he
said, adding that the country has one of the fastest growing mobile
money markets in Africa.
CBA specialises in banking mainly corporate and
high-end clients. The introduction of M-Shwari has helped it “serve a
wider population through partnering with mobile operators.”
Vodacom, a subsidiary of Safaricom’s parent company Vodafone, partnered with CBA Tanzania to launch M-Pawa in Tanzania mid-2014.
Customers, who are required to have an active
M-Pesa account, are offered month-long loans at a one-time interest of
nine per cent while deposits earn an interest of five per cent.
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